We have identified 5 key areas for immediate action to help manufacturers build greater agility and resilience into their future operations.

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How is COVID-19 affecting manufacturing?

The disruption on manufacturing caused by COVID-19 has severe operational, social and financial consequences. It is forcing manufacturers to rethink risk management and contingency plans, workforce safety protocols, manufacturing operations and new ways of working opportunities, all at the same time.

So far, manufacturing leaders have concentrated on solving the immediate challenges required to keep the business as stable as possible. They’ve formed rapid response teams (see also Accenture’s supply chain resilience recommendations) to gain a better understanding of their production demand changes, labor support challenges and supply chain ecosystem constraints.

Simultaneously, they need to focus on building a business that is as future-proof as possible using new technology solutions. This strategy will not only increase resilience, protect operations, and support workers through the crisis, but will also help sustain a competitive advantage to accelerate business growth once economies start to rebound.

Five actions to build the agility you need now and in the future

1. Understand the impact of demand disruptions

Demand priorities in product portfolios have changed drastically. We see three key scenarios affecting manufacturing assets:

Manufacturers are transitioning and repurposing legacy lines to make new products to support the community (e.g. distillers producing hand sanitizers).

Where demand has drastically fallen off or supply chains have been disrupted, manufacturers are slowing or shutting down production volumes.

In all scenarios, manufacturers need to rapidly identify the products that are most critical for stabilization and growth, shore up associated supply chains, and reconcile the critical skills to meet near term and future demand.

We recommend taking the following actions:

Work with planners to confirm customers’ and the market’s actual needs in order to segment demand of critical products needed for production reprioritization.

Segment operations based on market outlook, taking into consideration supply chain input for customer demographics, geographies, market sales channels, and decide which production is in high demand, requires repurposing, slowing down, shutting down or re-channelling.

Develop a road map for the next wave of in-demand changes and product needs.

2. Manage workforce safety and flexibility

COVID-19 creates significant workforce availability, safety and productivity challenges. Absenteeism may rise because of illness or reluctance and remote support may be required due to quarantine guidelines. These factors will likely cause a decline in productivity as new work processes are put in place at work sites to ensure health adequacy and social distancing of personnel, and revised skilling for multi-role coverages or new product lines and processes are introduced.

A “worker-first” mindset requires meeting distancing protocols and unique personal protective equipment requirements for the safety of workers and their families. Workers are looking to their leadership for support in staying healthy and productive. Our pragmatic human resilience recommendations are designed to help companies keep the trust of their workforces by addressing not only their physical safety, but also their mental well-being and need to stay connected with coworkers.

We recommend the following actions to support both employees and contractor partners:

Develop flexible staffing levels to accommodate production ramp-ups or slowdowns.

Optimize crewing schedules taking into account social distancing requirements and additional time to allow workers to follow new personal health processes.

Implement a remote working policy that balances safety and business continuity, including actions in response to cases of confirmed COVID-19 exposure.

Implement new safety practices on site, including sanitizing options in more locations, health checks before entering sites, and revising transport and plant processes and canteen schedule to maintain social distancing between workers.

Accelerate deployment of head mounted displays (e.g. hololens, realware), and mobile devices to supplement onsite skillsets with remote access to off-site specialists and personnel where collaboration is needed.

Re-engage underutilized employees on transformational initiatives, development opportunities, or with other business units requiring additional capacity.

3. Ensure manufacturing ecosystem viability

Ecosystem relationships typically suffer the most during massive market disruptions. Given the increasing adoption of ecosystem-based global supply chains, this is a challenge for manufacturers. They must understand the implications of COVID-19 and contract provisions for each critical ecosystem player, including material suppliers, contractor companies, co-manufacturers and logistics providers.

Our recommendations include the following actions:

Confirm that critical supply from main or secondary sources can accommodate in demand product mix changes. Determine if supply price points or delivery lead times have changed.

Assess whether co-manufacturing alliance partners and the extended ecosystem are still viable options and whether they can meet any new demand/product mixes.

Reach out to major contractors supporting the sites and understand the measures they are putting in place to enable safe work practices and any adjustments in processes which may need to be established and new requirement for site entry.

Determine which market delivery routes are a priority and if third-party and other logistics providers can continue to serve through those routes and if not, secure alternative interim carriers.

Review contracts to determine if any obligations need to be changed in the light of the current situation.

4. Rebalance physical production network assets

The rapidly changing demand/product mix, combined with workforce and ecosystem availability challenges, may be substantially disrupting manufacturers’ existing physical production networks. Companies must make fast and accurate decisions on the capital investment and effort required to redeploy underutilized assets or build greater flexibility in current assets (e.g. pack out types, package quantities) in the short term. At the same time, they must ensure those decisions do not inhibit future growth.

5. Leverage digital capabilities

Digital enablement is an essential part of fueling rapid change and building resilience in manufacturing. This is true across a whole range of functions, including demand/portfolio analysis, demand/supply scenario analysis, labor/skill identification and scheduling, remote work capabilities, ecosystem relationship collaboration, and network analysis. Manufacturers with digital platforms, accessible data and advanced analytical capabilities will be able to respond more quickly, accurately and successfully to COVID-19 disruptions. We are already seeing exceptional speed of standing up remote ways of working within plant and production environments – now is the time to keep accelerating these ideas that have been on the digital plan.

At this time, we recommend paying particular attention to the following actions:

Envision, design and implement a digital strategy to increase flexibility, reliability, sustainability and value for both base and disrupted operations.

Deploy digital solutions that build resilience. Be willing to start small with a pilot, scale quickly, and deploy across your network.

Coronavirus & manufacturing: Looking to the future

The COVID-19 pandemic will also have long-lasting implications for the future of manufacturing. It has clearly highlighted the pressing need for businesses to build greater responsibility, agility, responsiveness, and resilience into their manufacturing operations.

All manufacturers need to look closely at their end-to-end operations to assess how well positioned they are to respond to future disruptions with greater confidence and speed. This means taking a hard look at existing operating models – where and how work gets done (and for what reason), challenging legacy ways of working, and building in much more transparency and intelligence across the core dimensions of workforce, ecosystem partners, and the physical production network. For most, there remains work to be done to reshape themselves into a digitally enabled, resilient, and agile organization that can quickly adjust in the face of adversity.

The present challenge is an opportunity to learn, evolve, and reshape manufacturing for the future. The time to start is now.

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